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Fiat Chrysler Asks Judge to Toss GM's Racketeering Motion

Fiat Chrysler says GM's allegations that Fiat bribed union officials are “preposterous." And it asks a judge to deny renewal of a GM suit against FCAU.

Fiat Chrysler Automobiles  (FCAU) - Get Fiat Chrysler Automobiles N.V. Report  asked a federal judge in Detroit to deny General Motors’  (GM) - Get General Motors Company (GM) Report attempt revive a racketeering lawsuit alleging that Fiat got better labor contracts by bribing union officials, a media report says.

Shares of General Motors were up 4.4% to $27.90, while Fiat Chrysler was rising 2% to $11.21.

According to a report by Bloomberg on Monday, Fiat Chrysler said in court documents that GM's bribery allegations are “preposterous” and read like a script from a “third-rate spy movie.” 

In November, GM filed a federal lawsuit against Fiat Chrysler, accusing its rival of costing it millions through a union bribery scheme that lasted from 2009-2015 and resulted in prison sentences for top Fiat Chrysler executives and the United Auto Workers' chief negotiator as well.

U.S. District Judge Paul Borman threw out the lawsuit in July, saying GM failed to show how it was directly harmed by the payouts, which have landed nine former union and FCA officials in jail as a result of a federal corruption probe.

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GM asked Borman to reconsider his decision, citing fresh evidence of how officials were bribed - including allegations that Al Iacobelli, the former head of union relations at Fiat Chrysler, and others were paid through offshore accounts to spy on GM. 

GM alleged in a court filing that FCA spent millions on bribes by stashing the money in foreign accounts.

FCA replied in a filing Monday that the request is “apparently a vehicle for GM to make defamatory and baseless accusations about a competitor that is winning in the marketplace.”

Iacobelli was sentenced in 2018 to 5 1/2 years in prison for siphoning millions from a union training fund.

Iacobelli said GM hasn’t provided any evidence of the existence of the foreign accounts it says were used to pay officials - calling the new allegations “a wild and completely unsupported tale,” Bloomberg reported.